Jim Cramer Doubts Arista Networks, Inc. (ANET) Despite Its Low Price - Data Center Concerns!

We recently published a list of Jim Cramer Put These 16 Stocks Under a Microscope. In this article, we are going to take a look at where Arista Networks (NYSE:ANET) stands against other stocks that Jim Cramer put under a microscope.

On Thursday, Jim Cramer, the host of Mad Money, shared his thoughts on the president’s recent stance against the “false free trade era,” expressing his agreement with the shift away from free trade.

“Yes, I’m not a big fan of free trade. Yes, I feel that our country has been abused by our so-called trading partners, especially when it comes to cars. And yes, I favor the 25% tariff on automobile imports. Close watchers of the show know that this is not a new view for me. I’ve seen China devastate entire industries in this country.”

READ ALSO: Jim Cramer Commented on These 8 Stocks Recently and Jim Cramer Discussed These 9 Stocks Recently

Cramer said that America made a “deal with the devil” in the 1990s by allowing the influx of cheap goods from overseas. He noted that while there is nothing inherently wrong with affordable products, the trade-off has been the decimation of American industries and the devastation of factory towns across the country.

Cramer observed that the loss of manufacturing jobs has been a major concern. He noted that while the decision to import cheap goods may have seemed like a good deal at the time, in retrospect, it has led to significant societal and economic damage. He added:

“Now the president has declared that false free trade era is over, and I’m on board with this even as I wish he could lay out a clear plan rather than rolling out the tariffs one by one.”

He emphasized that if America wanted to bring back manufacturing jobs, sacrifices would be required, including the imposition of tariffs. The most important point for Cramer was the acknowledgment that these jobs, along with the many ancillary positions tied to them, had been lost, but there might be a chance for some of them to return.

“Factory jobs may not be as important these days as every other kind of job, frankly but when we look around our country at all these gutted small towns that have led to such despair, such drug use, such homelessness, the bargain for cheap goods, I think it’s a mistake. I’m glad the White House is finally going full speed in the opposite direction. It’s about time.”

Our Methodology

For this article, we compiled a list of 16 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 27. We listed the stocks in ascending order of their hedge fund sentiment as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Arista Networks, Inc. (NYSE:ANET)

Number of Hedge Fund Holders: 78

A caller noted Arista Networks, Inc.’s (NYSE:ANET) PE of 33 and in response, Cramer commented:

“It’s never been this cheap that I can recall and you know, I love Jayshree Ullal, but here’s the problem, it’s a data center stock. We gotta see some bounce in the data center. I cannot stick my neck out and have one more data center in my Charitable Trust… Candidly, it’s been a house of pain.”

Arista Networks (NYSE:ANET) offers cutting-edge networking solutions for data centers, campuses, and routing, with an emphasis on AI-powered switches and software for automation, monitoring, and security. Last week, Cramer was bullish on the company’s CEO but did mention that the stock has been hit.

“No, Arista’s been an amazing stock for many years and that’s because Jayshree Ullal is such a fantastic executive. Right now, it’s caught up in the data center negativity. At this point, this stock is now down 50 straight points. I’m gonna bet on Jayshree here. I would buy it.”

Overall, ANET ranks 7th on our list of stocks that Jim Cramer put under a microscope. While we acknowledge the potential of ANET as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ANET but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.